A Meh Bargain

The budget negotiators have stopped pretending that a major deal is doable:

Congressional leaders are already ruling out a big breakthrough in what amounts to the first budget conference in four years, and the eighth major budget commission in three years. It will not lead to a “grand bargain,” according to Senate majority leader Harry Reid and House Budget Committee chairman Paul Ryan. Indeed, the two Congressmen required for any deal that would reform the tax code — House Ways and Means Committee chairman Dave Camp and Senate Finance Committee chairman Max Baucus — have not been appointed to join the group.

So what will the conference do? The 28 members are required to send a report of recommendations to the full chambers by Dec. 13. The conference will likely focus on crafting a small deal to avert the next fiscal crisis early next year.

How Chait will evaluate the results:

If you want to judge whether any agreement makes sense, the best guide is not whether Democrats win revenue, but whether they win permanent changes in policy. The domestic appropriations budget gets written year by year. Trading away permanent changes to Social Security or Medicare in return for temporary increases in the discretionary budget is a bad deal — it would boost the recovery, but at the cost of handing conservatives a one-sided victory over the scope of government. If Obama gives Republicans permanent changes in return for temporary concessions, it will be clear Republicans out-negotiated him on sequestration. If Obama can get other permanent policy victories — different (and more regressive) forms of taxation, or funding for early childhood education — that is the sort of victory that could be traded for long-term entitlement cuts.

I have to say I don’t agree. To get some infrastructure stimulus now while cutting entitlements in the future would be perfectly acceptable to me. I want more boost to get out of this recession, as well as credible entitlement and defense cuts for the future. Collender’s advice to me and other onlookers:

The bottom line is that its important not to overreact to anything the budget conference committee does this week. Not only will the meetings be very preliminary; they almost certainly will be virtually insignificant.